Directional Index & RSI hint at selling before 7/16 earnings

13 juil. 2020

Please study the chart. There are two vertical dotted lines to show the points being compared. See the high RSI. Here the directional moving index shows positive and negative lines, and the average. On my chart I also have a directional index (DX) line and I have printed the values for DX on the indicator.

Values over 40 are strong, and when this line went over 60 in Feb., it immediately turned lower, price stalled and made a pullback. Now in July I am looking for another retreat of DX, which would result if profit taking occurs before earnings.

I bought 500 strike 7/17 expiry puts for $4.05, and I will sell before earnings. IV rise will also increase value if price moves lower.

13 juil. 2020

Transaction en cours

Sold most of my puts for $12, holding three contracts overnight. This afternoon selloff is a good self-test for traders. How calm were you as you assessed the selloff? Did you have stop losses or profit exits set?

14 juil. 2020

Trade fermée manuellement

Sold remaining puts for $20 and $25.
(Opened a small position of weekly 580 calls at $5.50)